Biden administration extends pause on student loan payments through January
The extension will give borrowers more time to pay as others call for debt cancellations
As the U.S. continues to recover from COVID-19, the Biden administration announced on July 6 that federal student loan payments will remain suspended through January 2022.
The extension means borrowers will not have to make payments on federal student loans, and the interest rates will be set at 0%. Debt collection efforts will remain on pause until the suspension expires on Jan. 31, 2022.
This is an extension of a pause that began at the start of the pandemic, which was scheduled to expire next month. The Department of Education also said this will be the final extension.
“This will give the Department of Education and borrowers more time and more certainty as they prepare to restart student loan payments,” President Joe Biden said in a statement. “It will also ensure a smoother transition that minimizes loan defaults and delinquencies that hurt families and undermine our economic recovery.”
The Trump administration originally suspended federal student loan payments in March 2020 and later extended them through January 2021.
Before the January 2022 extension, the most recent one going through Sept. 30 was made by Biden when he took office in an effort to continue easing the effects of COVID-19.
“The pause has been a critical lifeline so they don’t have to choose between paying for basic necessities or their student loan during the pandemic that upended their lives,” Biden said.
The road to economic recovery from COVID-19 has been difficult, but Education Secretary Miguel Cardona said the continued extension is meant to give borrowers enough time to prepare for their payments to resume.
“As our nation’s economy continues to recover from a deep hole, this final extension will give students and borrowers the time they need to plan for restart and ensure a smooth pathway back to repayment,” Cardona said in a statement.
However, this will be the last extension and many are still concerned that borrowers will not be ready in time to resume making payments.
Democratic leaders, such as Senator Elizabeth Warren, have recently urged Biden to extend the pause even further, until March 2022, or to cancel student debt to increase relief on Americans still facing the financial impacts of COVID-19.
— Elizabeth Warren (@ewarren) August 6, 2021
Along with democratic leaders, many Americans with looming student debts are applauding the extension of the pause, but continue to call for cancelations of debts in an attempt to help relieve impending financial stress.
I am grateful for another extension on my student loan payment. I would be even more grateful if they’d just cancel it all though. Because at this point…..
— Erin. (@_wellERINsaid_) August 7, 2021
Despite many calls for cancellation of student loan debts, the Biden administration has yet to put it into action.
“As today’s jobs numbers show, we have the tools that will allow us to beat COVID-19 and keep our economy recovering at a record rate,” Biden said. “But we know there is more work to do and the road will still be long for many people – especially for the one in six adults and one in three young people who have federal student loans.”
This article is part of Broke in Philly, a collaborative reporting project among more than 20 news organizations focused on economic mobility in Philadelphia. Read all of our reporting at brokeinphilly.org.